The U.S. Court of Appeals for the Second Circuit recently joined the Seventh Circuit in holding that printing a credit card expiration date on an otherwise properly redacted receipt does not constitute an injury in fact sufficient to establish Article III standing to bring a claim alleging a bare procedural violation of the federal Fair and Accurate Credit Transactions Act of 2003 (FACTA).

Accordingly, the Second Circuit affirmed the ruling of the trial court dismissing the plaintiff’s amended complaint.

A copy of the opinion in Crupar-Weinmann v. Paris Baguette America, Inc. is available at: Link to Opinion.

The plaintiff brought suit against the defendant restaurant alleging a willful violation of FACTA based on receiving a receipt from the restaurant that contained her credit card’s expiration date. Even after amendment, the plaintiff’s allegations were otherwise devoid of any specific factual allegations concerning her interactions with the restaurant or any consequences that stemmed from the display of her credit card’s expiration date.

Instead, the plaintiff alleged that by “knowingly and recklessly” printing card expiration dates on receipts, the restaurant “created a real, non-speculative harm in the form of increased risk of identity theft.”

The trial court dismissed the plaintiff’s amended complaint with prejudice, concluding that she lacked standing to bring claims for violations of FACTA’s requirements.

The Second Circuit found it dispositive that Congress clarified FACTA in the Credit and Debit Card Receipt Clarification Act of 2007 (“Clarification Act”) stating that “[e]xperts in the field agree that proper truncation of the card number, . . . regardless of the inclusion of the expiration date, prevents a potential fraudster from perpetrating identity theft or credit card fraud.” The Court stated that “[t]his makes clear that Congress did not think that the inclusion of a credit card expiration date on a receipt increases the risk of material harm of identity theft.”

The plaintiff argued that the Clarification Act maintained FACTA’s prohibition on printing credit card expiration dates on receipts, which reflects Congress’ continued belief that the action poses a material risk of harm. However, although the Second Circuit acknowledged the Clarification Act maintained FACTA’s prohibition, it “decline[ed] to draw plaintiff’s proposed inference, because in the same Act, Congress expressly observed that the inclusion of expiration dates did not raise a material risk of identity theft.”

Moreover, the Second Circuit noted that “Congress could not have been clearer in stating that ‘[t]he purpose of this Act is to ensure that consumers suffering from any actual harm to their credit or identity are protected while simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.’”

Based on this clarification of FACTA, the Second Circuit held that “a plaintiff must allege that, at a minimum, the bare ‘procedural violation presents “a risk of real harm” to [her] concrete interest.’”

The U.S. Court of Appeals for the Seventh Circuit reached the same conclusion in Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724, 727 (7th Cir. 2016).

The Second Circuit thus joined the Seventh Circuit in ruling that “'[i]n these circumstances, it is hard to imagine how the expiration date’s presence could have increased the risk that [plaintiff’s] identity would be compromised.’”

Accordingly, the ruling of the trial court dismissing the amended complaint was affirmed.

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Jeffrey Karek practices in Maurice Wutscher's Commercial Litigation, Consumer Credit Litigation, and Appellate groups. He has substantial experience in defending consumer finance lawsuits in both state and federal trial courts, and on appeal. Such litigation includes allegations brought under TILA, HOEPA, RESPA, FDCPA, TCPA, FCRA, and state consumer protection statutes, including in the defense of putative class actions. Jeff received his Juris Doctor from the University of Michigan Law School, and graduated magna cum laude with a Bachelor of Business Administration degree from Western Michigan University.